Shanghai Electric Group Co Ltd (SHA:601727) has decided not to pursue the acquisition of BRL 4 billion (USD 987m/EUR 839m) worth of transmission projects in Brazil from Eletrosul.
Eletrosul's parent company, Brazilian electric utility Centrais Eletricas Brasileiras SA (BVMF:ELET3), better known as Eletrobras, announced the Chinese company's decision to its investors on Friday. The outcome follows power sector regulator Aneel's ruling that the two companies should come to an agreement by that same day.
As part of a preliminary agreement signed on June 5, 2017, Shanghai Electric was supposed to take control of transmission projects in Rio Grande do Sul state that were awarded to Eletrosul in a tender back in 2014. These projects include the addition of 1,900 km (1,180 miles) of transmission lines, construction of seven new substations and expansion of 16 existing substations.